With an investment of MX$157 million (US$7.93 million), Engie will extend its distribution network to supply 13 industrial parks in Puebla. The system will supply businesses at Textile City, located in Huejotzingo, Puebla, and will be 4.2km long. Engie expects to start construction in 2023.
This project will enable Engie to reach 102km of natural gas distribution infrastructure for Huejotzingo, San Martín Texmelucan and Puebla’s urban area. The company underlined that over the past 25 years, it has been present in 10 Mexican areas and has invested in distribution, as well as three pipelines amounting to 1,300km of infrastructure. The company has developed eight renewable energy power plants in Mexico, too. Engie also stated that it invests MX$150 (US$7.58 million) in Puebla annually, contributing to energy security and economic development.
“As is well known, the industrial sector has a unique opportunity in Mexico today due to the regionalization of production chains, after the lessons learned from the pandemic and geopolitical conditions. For its competitive development, it will require reliable, competitive and clean power sources,” Ana Laura Ludlow, VP Chief Government Affairs & Sustainability, Engie Mexico, said to MBN.
This project adds to Engie’s recent announcement of a collaboration with CFE to expand the Mayakan pipeline in Yucatan. The companies celebrated an agreement with Engie to determine the technical and commercial terms for the project. The pipeline will be 700km long and will connect with PEMEX in Tabasco, then move to Valladolid, Yucatan. The development of the project, with which the state utility aims to supply gas to the partially isolated state of Yucatan, is expected to last 27 months. According to CFE, this agreement will guarantee a reliable, continuous and quality supply of natural gas and will boost the presidential commitment not to increase electricity rates.
These projects also represent a great success in the development of Mexico’s energy matrix. According to Ludlow, this is a necessary step toward the energy transition. “Today, the country has one of the most competitive natural gas prices in the world and its availability offers an excellent opportunity for the industrial and transportation sector to begin this path to energy transition while technology and green gases begin their development in the country,” said Ludlow.
Ludlow also discusses the importance of legal frameworks as part of the development of greener energy in Mexico as well as a step towards the energy transition. Many experts have pointed toward blending natural gas with hydrogen to make the former resource greener, but the hydrogen industry is still somewhat underdeveloped. “For [the development of green hydrogen as an energy source], the development of renewable energy at competitive costs will continue to be required, and for the scaling up of projects, the definition of hydrogen as an energy source will be key to incorporate it into the country’s energy strategy and begin to regulate its use. In the most recent update of the PRODESEN, hydrogen is mentioned as an alternative for the diversification of the national energy matrix.”